Tuesday, May 30, 2017

Whoever directly or indirectly, corruptly gives, offers, or promises anything of value to any person, or offers or promises such person to give anything of value to any other person or entity, with intent to influence the testimony under oath or affirmation of such first-mentioned person as a witness upon a trial, hearing, or other proceeding... or with intent to influence such person to absent himself therefrom; shall be fined under this title or imprisoned for not more than two years, or both.18 U.S. Code § 201 – Bribery of public officials and witnesses

It may seem like this is stating the obvious, but it's a crime to bribe a witness to a U.S. federal court. Funny thing, though; Chevron has done just that, to the tune of $2 million dollars. Yet no one inside Chevron has demanded an explanation for this – until now. In advance of the company's annual shareholder meeting tomorrow, shareholders and members of the public are demanding that Chevron's Board of Directors determine just who authorized the payments of bribes to disgraced former Ecuadorian judge Alberto Guerra in exchange for his testimony in Chevron's retaliatory lawsuit against the affected Ecuadorians communities and their lawyers.

To recap, Chevron was found liable in 2011, after decades of legal battles, for $9.5 billion for having deliberately polluted the Ecuadorian Amazon by dumping over 16 billion gallons of toxic waste and causing a massive health epidemic which has costs well over a thousand lives to date. Rather than accept responsibility and pay for a cleanup, Chevron countersued the Ecuadorians and their lawyers and fabricated an elaborate lie alleging it was the victim of an injustice and that the Ecuadorian verdict against it was ghost-written by a judge that the Ecuadorian communities had bribed. Chevron won that separate case in a shockingly-biased trial and did so based primarily on the sworn testimony of known-liar Alberto Guerra. (For any readers wanting an extended review of the facts, please read this excellent post from our friends at EarthRights International.)

As we have written about before, Guerra was already seen as an unreliable witness at the time of the countersuit and even the presiding judge, Lewis Kaplan, acknowledged that he was a liar and corrupt. He noted that Guerra "often has been dishonest," and that he had "multiple" times in his professional history "accepted bribes," "lied," and "broken the law." And Kaplan also noted that "Guerra's willingness to accept and solicit bribes" among "other considerations, put his credibility in serious doubt, particular in light of the benefits he has obtained from Chevron." Yet, Kaplan allowed his testimony to be admitted. Guerra's testimony was central to Chevron's allegations and the trial court's findings. It was the only evidence of a scheme to bribe the presiding Ecuadorian Judge to rule against Chevron.

In July 2012, Chevron sent Andres Rivero, one of its U.S. lawyers, and a private investigator to Ecuador – with $18,000 in a suitcase – to meet with Guerra. The cash was supposedly to buy Guerra's computer; Chevron hoped to find a draft of the final judgment, which Guerra claimed he had written. Recordings of the meeting show Rivero, the investigator, and Guerra negotiating a payment:

In January 2013, Chevron and Guerra signed a contract detailing the benefits Chevron would provide to Guerra and his family in exchange for Guerra testifying. The benefits were guaranteed for two years, with an option of renewal... The benefits Chevron agreed to pay Guerra were "compensation" and were separate from and "in addition" to "travel and other expenses" associated with testifying.

All told, since July 2012, Chevron had given Guerra at a minimum:

$432,000 in monthly payments;

$12,000 for household items;

$48,000 in cash in exchange for evidence;

A new computer;

Payment of all U.S. taxes;

Expenses for Guerra and his family to move to the U.S.;

Health insurance for Guerra and his family;

A car and car insurance; and

Payment for an immigration attorney for Guerra and his family, an attorney to represent Guerra in the US proceedings, an Ecuadorian attorney, a tax attorney, and an accountant.

Money well spent for Chevron. Or was it?

You might think Chevron's ongoing payments to Guerra would ensure he kept up his lies for Chevron, but Guerra's corruption was too much to keep hidden. When he took the stand in a related arbitration proceeding in 2015, he admitted that he lied under oath in Kaplan's court! In fact, he confessed that he misled the court about the bribe and about having arranged to ghostwrite the judgment. He also admitted he did so specifically to get a larger payout from Chevron. This put Chevron in serious trouble as it became even more clear that the company paid him specifically to lie for it.

When pressed about the fact that Chevron bribed Guerra and didn't even get what it paid for, CEO John Watson might try to defend his actions by claiming that Chevron didn't know Guerra was going to lie. Yet, Chevron's lawyers coached him in preparation for the trial for 53 days! Of course, Chevron and its lawyers at the corporate hatchet firm Gibson, Dunn & Crutcher knew Guerra was going to lie. They had been negotiating a price for this lies for years as the ChevronPit blog has pointed out:

Chevron lawyers led by Randy Mastro then coached Guerra for 53 consecutive days before he took the stand in Kaplan's courtroom. "Money talks, but gold screams," Guerra told Chevron's lawyers when he negotiated his "fee" for testifying.

Now Chevron faces an enforcement action in Canada, where the Ecuadorians continue to pursue the company's assets to finally pay for a cleanup. There will be another hearing in that case this October and Chevron will have the opportunity to explain Guerra's contradictory testimony in another court. I have a feeling it will do almost anything to avoid that embarrassment, however. In the meantime, CEO Watson and senior legal counsel Hewitt Pate will have to explain to shareholders how bribing a federal witness to commit fraud in U.S. federal court is an appropriate use of millions of dollars of shareholder funds. For a company already known worldwide as a gross polluter and environmental criminal, Watson has achieved the seemingly impossible by making Chevron's reputation even worse.